McLaughlin's guilty plea: 'I understand why they are charging me'

Dracut resident Michael McLaughlin, right, leaves U.S. District Court in Boston with his attorney, Thomas Hoopes, after pleading guilty to charges he falsified documents to hide from state and federal officials his grossly inflated salary as the former executive director of the Chelsea Housing Authority. photo/State House News Service

Wearing a suit and tie, McLaughlin, 67, of 875 Methuen St., Dracut, stood before U.S. District Court Judge Douglas Woodlock and pleaded guilty to four counts of falsifying a record in a federal agency matter, charges Woodlock described as "serious federal felonies."

When Woodlock asked McLaughlin if he understood the charges, McLaughlin responded, "I understand why they are charging me."

Woodlock delayed sentencing until May 14 so that the Probation Department can prepare a pre-sentencing report to aid the judge in deciding the appropriate punishment, anything from probation up to 20 years in prison per count, three years of supervised release and a fine of $25,000, he said.

"You realize you are pleading guilty in the face of uncertainty," Woodlock told McLaughlin.

McLaughlin agreed to plead guilty in exchange for a lesser sentence in an undisclosed deal in which he agrees to cooperate with the government and could have him testifying against other politicians, according to court documents.

McLaughlin signed an agreement in which he agrees to provide "substantial assistance in the investigation or prosecution of another person who has committed a criminal offense.

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While that other person is not named in court documents, McLaughlin's name has been linked to a federal probe into whether Democratic Lt. Gov. Tim Murray accepted improper campaign donations.

Murray has maintained that he was duped by McLaughlin, and said he has never asked him for fundraising help. "I am outraged and frustrated by Mr. McLaughlin's actions and . . . I feel like I've been misled," Murray said in January 2012.

The Boston Globe, which uncovered McLaughlin's actual compensation, reported that McLaughlin and Murray exchanged 80 phone calls over the course of a seven-month period.

In court, McLaughlin admitted that he falsified his annual salary in reports over three years from 2008 to 2010. In 2008, while he reported to the Department of Housing and Urban Development (HUD) that his annual salary at the Chelsea Housing Authority was $151,945, his tax returns show a total compensation of $242,908. In 2009, McLaughlin reported to HUD his annual salary was $156,503, but his total compensation was $292,902. His 2010 total compensation was $324,896 -- making him one of the highest-paid housing authority directors in the country; he reported to HUD his salary was $160,415. McLaughlin was overseeing 1,415 low-income apartments.

After his salary was exposed, McLaughlin resigned as executive director in November 2011.

Assistant U.S. Attorney S. Theodore Merritt told the judge that at the end of each year, McLaughlin would pay for his inflated salary out of federal funds. The Chelsea Housing Authority's board provided little, if any, review of the budget, Merritt said.

McLaughlin denied that drugs, alcohol or mental-health issues were behind his deception. Merritt noted, "The motive (was that McLaughlin) had to hide his salary."

But in 2011, McLaughlin's scheme came crashing down when HUD responded to a new regulation to review the five highest-paid employees. McLaughlin's salary was "exorbitant" based on other housing authority directors' salaries across the country, Merritt said.

Sitting in court, huddled next to defense attorney Thomas Hoopes, McLaughlin repeatedly looked at the throng of media that sat in the jury box to watch the proceedings. McLaughlin and Hoopes would later try to avoid those same reporters by leaving out a side door to the courthouse, declining comment all the way.

If McLaughlin, a Billerica native, can avoid going to prison and possibly save his pension, it will be part of his long history of getting out of jams that date back to the 1970s. As a state representative from Billerica, he was investigated by the Middlesex District Attorney's Office for pressuring local business owners to make donations to his campaign.

He also pleaded the Fifth Amendment 71 times before a grand jury that was investigating the hiring of relatives of reputed Boston mobsters for county jobs.

In 1976, he was appointed to the seat previously held by Paul Tsongas on the Middlesex County Commission, overseeing the county court, jail and work-release programs. In 1978, he made an unsuccessful run for Congress. A year later, he was hired as the Somerville Housing Authority director, a position he held for seven years simultaneously as county commissioner, until 1985.

In the late 1980s, McLaughlin was the subject of a questionable lobbying effort while seeking the Lowell city manager's job.

McLaughlin became the Lowell Housing Authority director in 1986. In 1987, he became the focal point of a questionable lobbying effort while vying for the city manager job with James Campbell. State police wiretaps caught reputed Lowell bookie Jackie McDermott having multiple phone conversations with McLaughlin, and trying to line up council votes on McLaughlin's behalf. McDermott was gunned down a year later by Billy Barnoski, who is serving life in prison.

By 1990, LHA board members, citing McLaughlin's political strong-arming tactics, bought out the remainder of his contract. From there, McLaughlin entered a stormy two-year employment as Methuen's town manager. McLaughlin was hired at the Chelsea Housing Authority as its executive director in 2000.

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